Published: 27 January 2014

Zimbabwe intends to establish a Statutory Reserve Fund to be administered by the Reserve Bank and government may borrow from the fund for infrastructural development.

The statutory reserve fund will be funded from a percentage deducted from bank deposits.

Previously, Zimbabwean banks were required to lodge a cumulative 5% of both offshore and local deposits as statutory reserves.

The statutory reserves were however scrapped in 2010 in a move aimed at improving liquidity and lowering interests' rates.

The central bank kept the statutory reserves as a buffer used to protect banks in the event of a sudden rise in withdrawals.
- herald

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